Gold miners were in demand as the safe-haven precious metal climbed.

Gold miners shone on a difficult day for the wider market as growing fears the West could launch military strikes on Syria spurred investor demand for the safe-haven precious metal.

The yellow metal today rose to $1,418 (£913) an ounce – its best level since May – amid mounting unease about the threat posed to Middle Eastern stability by intervention in Syria. That in turn lifted those London-listed companies that mine for gold.

Fresnillo, a Mexican silver and gold producer, jumped 87p, or 7.1pc, to £13.10 and Randgold Resources advanced 210p to £53.35, gains that made them the second and third biggest risers in the FTSE 100 respectively. In the FTSE 250, Centamin, which mines for the precious metal in Egypt, put on 1¼ to 41p and African Barrick Gold added 3.9 to 170.3p.

It has been a volatile year for gold and the precious metals miners. Worries that the US Federal Reserve will begin to slow the pace of its quantitative easing programme saw gold plunge between April and June.

However, more recent economic data from the US – indicating the Fed may not taper its bond-buying as soon as some had feared – has helped gold rally this month to re-enter bull market territory.

Related Articles

Polymetal International slumped 68½ to 741p on broker downgrades ahead of its half-year earnings tomorrow. Analysts at both HSBC and Societe Generale cut their recommendations on the group, with the former rating the company “neutral” and the latter labelling it a “sell”.

Silver and gold group Hochschild Mining also slid 16.8 to 223.1p after influential broker Goldman Sachs repeated its “sell” stance on the company, following “in-line” interim results last week. The Goldman analysts reckon the group’s balance sheet will be “stretched to breaking point in 2014-15”.

“Despite the operationally solid set of results and cost-cutting measures the company has undertaken, we continue to believe that this will be insufficient and that Hochschild will continue to burn cash on our estimates,” they said.

Nevertheless, jitters over Syria were the main factor behind the FTSE 100’s 51.13-point fall to 6,440.97. European and US stock markets lost ground, while the DFM General Index in Dubai slumped 7pc on unease about a potential conflict. Worries that a dispute over a housing tax could lead to a break-up of Italy’s governing coalition gave traders even further incentive to shy away from riskier equities.

Similarly, a warning from the US treasury secretary, Jack Lew, that the nation’s debt ceiling needed to be lifted as soon as possible added to the general market nervousness.

Corporate earnings did provide some cheer.

Boosted by well-received half-year results that included an encouraging outlook statement, oil services group Petrofac rose 108p to £13.73. Bunzl, the distribution group, was another business buoyed by first-half earnings and added 22p to £13.76. The company also impressed with news of acquisitions in the UK and Mexico, the latest in a series of purchases.

Antofagasta, however, disappointed with its six-month numbers and shed 30½ to 884½p. The Chilean copper miner posted a 37.3pc drop in pre-tax profits to $981m (£631.4m) as falling metal prices weighed on its results.

Elsewhere among the blue-chip fallers, reports that MPs on the Parliamentary Commission on Banking Standards recommended exploring a break-up of state-backed lender Royal Bank of Scotland inevitably dragged on its shares, which ended 14.2 lower at 330.1p.

Syria cast a shadow over other sectors. Worries over the impact of military action in the region hit the tour operators, with TUI Travel sliding 13½ to 343.9p and Thomas Cook off 12.6, or 8.5pc, at 136.1p.

Like gold, oil prices climbed higher on Syrian tension and Brent crude hit $114 a barrel in intraday trade, a six-month high. That weighed on British Airways and Iberia parent International Airlines Group, off 15.3 at 300½p. Indeed, in a research note examining the broader sector, Investec analyst James Hollins said that oil prices above $100 a barrel will act as “a severe headwind to airlines’ profitability”.

Mr Hollins also turned more cautious specifically on IAG and lowered his rating on the carrier to “hold” from “buy”, a downgrade that further weighed on the shares.

Conversely, a broker upgrade lifted Marks & Spencer 7½ to 479.1p. The experts at Citigroup, house broker to the retailer along with Morgan Stanley, argued that the pickup in the UK economy as well as company investment in IT, logistics and the supply chain “have markedly improved the credibility of double-digit 2015 and 2016 M&S earnings-per-share growth forecasts”.

As a result, they raised their recommendation to “buy” from “neutral” and increased their price target to 535p from 470p.

The same went for Premier Foods, which was also given a boost by one its corporate brokers. Analysts at Credit Suisse turned positive on the debt-laden group – the owner of the Hovis and Mr Kipling brands – and lifted their rating to “outperform” from “neutral”.

“There are signs at last that Premier Foods’ business has stabilised, and is even beginning to show some signs of growth,” they said, helping the group add 11¾ to 135¾p.

Finally, there was demand for small-cap sensor developer Transense Technologies after the group revealed it had received two “major” orders for its mining vehicle monitoring system worth about £1m. Shares in the company jumped ½ to 8p on Aim, a 6.7pc rise.

The Telegraph Investor

Editor's comment:

Priced to be great value for new investors and those with large portfolios.